US hiring boom continued in February with 311,000 added jobs
The US’s hiring boom continued in February with employers adding another 311,000 jobs and the unemployment rate remaining close to its 50-year low at 3.6%.
The number was sharply lower than the 517,000 new jobs the labor department announced were added in January, following months of slowed job growth. But it was far higher than the 220,000 economists had been expecting and comes as inflation has remained stubbornly high. The Federal Reserve has signaled it will continue to aggressively hike interest rates in its fight to cool the economy and bring down prices.
The Fed chair, Jerome Powell, told Congress this week that there was still “a long way to go” to tame inflation, which fell to an annual rate of 6.4% in January from a four-decade high of 9.1% last June but remains well above the Fed’s target of 2% annually.
Powell indicated that more rate rises were likely. “Restoring price stability will likely require that we maintain a restrictive stance on monetary policy for some time,” he said.
So far the Fed sharp rate rise do not appear to have filtered through to the jobs market. The US currently has nearly 11m job openings – close to two vacancies for every unemployed American.
The labor department reported on Thursday that the number of people filing for unemployment insurance had increased by 21,000 to a seasonally adjusted 211,000 last week. But they remain below 2019’s pre-pandemic average of 220,00.
On Wednesday ADP, the US’s largest private payroll supplier, said payrolls increased by 242,000 in January, well ahead of the 204,000 positions economists had been expecting. ADP said wage growth had slowed slightly, down 0.1% to an annual rate of 7.2%.
“There is a tradeoff in the labor market right now,” said ADP’s chief economist, Nela Richardson. “We’re seeing robust hiring, which is good for the economy and workers, but pay growth is still quite elevated. The modest slowdown in pay increases, on its own, is unlikely to drive down inflation rapidly in the near-term.”